Under the closing process changes [slated to take place October 1, 2015*], which were developed by the Consumer Financial Protection Bureau, the HUD-1 settlement form, the Good Faith Estimate and the Truth in Lending Act disclosure form will be consolidated into two new forms, a Loan Estimate and a Closing Disclosure.

The Closing Disclosure must be given to the buyer three days before closing, and if certain changes are made after that point, the closing would be delayed another three days.

CFPB Director Richard Cordray spoke before Realtors earlier in the week, saying only three types of changes could lead to a closing delay: a change in the loan product (such as from a fixed-rate loan to an adjustable-rate loan), the addition of a prepayment penalty, or a change in the annual percentage rate of more than 1/8 percent (1/4 percent in the case of an adjustable-rate loan).

Although only these three events would trigger a delay, settlement service experts who have studied the changes say other events could unintentionally force delays as well. For example, lenders will have to delay the closing if parties agree at the closing to make even small or routine changes to what conveys to the buyer.

In addition, as a practical matter, lenders will need to get the Closing Disclosure finalized a week before the closing to ensure the buyer gets it within the three-day time frame.

Cash buyers often times opt to obtain a mortgage because of the current, historically low rates. Therefore, they would also be affected by the above changes.

If you are desirous of selling and closing before the end of summer, you may want to consider putting your home on the market now. You could avoid some angst while the government, lenders and closing agents iron out this new closing procedure.

The Extension — according to the NAR*:

WASHINGTON (June 17, 2015) –National Association of Realtors® President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark., released the following statement in response to the Consumer Financial Protection Bureau’s announcement of a proposed two-month delay for the implementation of the new Truth in Lending Act and Real Estate Settlement Procedures Act Integrated Disclosure, or TRID, regulation.

“The action announced today by the CFPB is a welcome step. NAR has long advocated the need to avoid implementing the new regulation during the peak summer selling season.

“NAR welcomes the CFPB’s proposed extension to October 1, 2015 as well as the earlier ‘sensitivity’ they offered to companies making a good-faith effort to comply with the new TRID regulation.

“We will continue to work with CFPB to minimize any possible market disruptions or uncertainty that could develop following the implementation.

“Realtors® appreciate that the CFPB has demonstrated an understanding of the need for additional time to accommodate the interests of the many consumers and providers.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.